Obama urges action on debt ceiling

In this Dec. 5, 2012, photo, President Barack Obama pauses as he speaks about the "fiscal cliff" at the Business Roundtable, an association of chief executive officers, in Washington. The political fight that took the nation to the verge of defaulting on its debts last year is back, overshadowed by "fiscal cliff" disputes but with consequences far graver than looming tax hikes and steep spending cuts. The government is on track to hit its $16.4 trillion borrowing limit later this month. And while the Treasury can keep the government functioning through early next year, Obama is bluntly insisting that any deal on the "fiscal cliff" must include an end to brinkmanship on the debt ceiling. (AP Photo/Charles Dharapak)

HONOLULU (AP) -- President Barack Obama is hailing a last-minute deal that avoids the so-called fiscal cliff but says it's just one step in a broader effort to boost the economy and shrink federal deficits.

Obama said in his radio and Internet address Saturday that the new law -- approved by Congress on New Year's Day and signed Thursday -- raises taxes on the wealthiest Americans while preventing a middle-class tax hike that could have thrown the economy back into recession.

With the "fiscal cliff" crisis barely over, Obama faces new battles in Congress over raising the country's $16.4 trillion borrowing limit, as well as more than $100 billion in automatic spending cuts for the military and domestic programs which were delayed by two months under the compromise.

Lawmakers promise to replace those across-the-board cuts with more targeted steps that could take longer to implement.

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Obama -- speaking from Hawaii, where he is on vacation with his family -- said he is willing to consider more spending cuts and tax increases to reduce the deficit.

But he said he "will not compromise" over his insistence that Congress lift the federal debt ceiling. The nation's credit rating was downgraded the last time lawmakers threatened inaction on the debt ceiling, in 2011.

If elected officials from both parties "focus on the interests of our country above the interests of party, I'm convinced we can cut spending and raise revenue in a manner that reduces our deficit and protects the middle class," Obama said.

In the Republican address, Rep. Dave Camp of Michigan said that as attention again turns to the debt limit, "we must identify responsible ways to tackle Washington's wasteful spending."

Americans know that "when you have no more money in your account and your credit cards are maxed out, then the spending must stop," Camp said.